Fraud crimes in the health sector cost the California health insurers millions of dollars. As a result, the government, federal and state, is aggressively prosecuting Medicare fraud. With increased scrutiny, many people, including physicians, medical institutions, and patients, have been arrested for deliberately submitting or causing others to submit fraudulent claims to government entities or private insurers.
If you have been arrested or charged with billing fraud, you risk years of incarceration and hefty monetary fines when found guilty. Additionally, you could face collateral consequences, such as the loss of your healthcare professional license, a damaged reputation, and a criminal history that will follow you for the rest of your life.
At CCLG: Los Angeles Criminal Attorney, we understand the consequences of a conviction, which is why we are here to defend you and minimize them. We have highlighted the legal definition of the crime, various types of billing fraud, key elements, penalties, and defenses to provide knowledge in case you are under investigation for or face healthcare fraud charges.
Legal Definition of Health Care Fraud
Also called billing fraud, HMO fraud, Medicare fraud, or health insurance fraud, health care fraud is defined under PEN 550(a) as knowingly and intentionally doing or attempting to do the following:
- Inflating the cost of medical procedures or services
- Overbilling for medical services
- Giving or obtaining kickbacks
- Performing unnecessary medical procedures or services
- Billing for medical services not provided
These schemes are executed to defraud healthcare benefit programs or to acquire, through false representation, pretenses, or promises, money or property belonging to or under the control of a private insurer or healthcare benefit program.
The fraud is widespread in California and nationwide due to the country’s nuanced and depersonalized healthcare system. Private insurers and government agencies cover the medical bills of patients receiving these services. When insurers pay bills instead of patients receiving treatment, the system creates a loophole that healthcare practitioners and patients exploit, leading to an increase in fraudulent cases.
Additionally, the bureaucracy involved in processing medical bills by health insurers further complicates the process, causing innocent people to make mistakes that are misconstrued as billing fraud. Most of these cases involve state-operated insurance programs like Medi-Cal that focus on older people, low-income families, and individuals with disabilities who cannot afford private health insurance premiums. Therefore, prosecutors and relevant government authorities treat these cases aggressively to prevent loss of taxpayers’ money and safeguard the vulnerable. However, the aggression sometimes leads to innocent individuals being arrested, charged, and wrongfully convicted for offenses they did not commit.
Most of those charged with health insurance fraud are medical professionals. However, hospital or insurance agency clerks and secretaries also face the charges. Sometimes, even patients can be defendants in these cases. Any person who deliberately falsifies or provides incorrect information to a health insurer with the intention of defrauding the company or unlawfully obtaining undue benefits faces a PC 550 violation charge.
Common Forms of Health Care Fraud
Whenever an individual defrauds the healthcare system or insurance programs, they commit healthcare fraud, which is a criminal violation. Perpetrators accomplish this fraud in several ways. These include:
Submitting Health Benefit Claims for Unrendered Medical Services
Many physicians and other healthcare experts violate PEN 550 when they submit health benefit claims for any form of medical service, equipment, or procedure they did not utilize or render to the patient. These claims are referred to as ghost claims and contain actual or fictitious patient names, but the services in question were never actually provided.
For instance, Dr. Ben is a pediatric surgeon who assists mothers during childbirth. Nevertheless, Ben skips most of these deliveries and instead uses surgical residents for the procedures. When billing, Dr. Ben lists his name as the person who performed the surgery with the insurance company. Under the circumstances, Dr. Ben is guilty of billing fraud because he files claims for services that he does not render.
Presenting Fraudulent or Untrue Claims
Submitting a deceitful or fraudulent claim is also a criminal offense. An example of submitting a fraudulent claim includes:
- Inventing a claim that does not exist
- Submitting a claim for medical services or procedures rendered, but the patient never needed them.
- Upcoding, meaning billing the insurer for a service, equipment, or procedure costlier than the one rendered.
- Charging those with insurance coverage for the services that you could have otherwise offered free of charge if they were paying out of pocket.
Double Billing
Medical practitioners also commit fraud under PEN 550 when they provide the required service and bill for the same, but submit multiple claims for the same service. Additionally, aiding or conspiring to submit multiple claims for a single service with the intention of committing fraud constitutes a violation of PEN 550.
For instance, Dr. Pete, a physician in Los Angeles, runs multiple tests, including an MRI on a patient, and submits a claim to the patient’s insurance for payment of these services. However, Pete submits a separate claim for the MRI, which was already factored into the first claim. In this situation, Dr. Pete is double-billing for a single service.
However, not all double-billing cases are intentional. A person can accidentally submit a claim for a single service twice, attracting billing fraud charges. The prosecutor will emphasize that submitting multiple claims for a single service was intentional. If you are not well represented by a criminal defense attorney, you could end up with a wrongful conviction. However, when you have proper legal representation, you can counter the prosecutor’s assertion by arguing that the double-billing was accidental or a simple mistake and present evidence to support the same.
Submitting Undercharges But Omitting Overcharges
It is unlawful for an individual to rebill or resubmit for payment a service that was previously undercharged while intentionally omitting the payments for services that were overcharged. When rebilling for undercharges, you have an obligation to bill for the services you previously overcharged. You can incur overcharges by mistake, so it is crucial to review your records regularly to identify discrepancies and correct them. However, you should fix the discrepancies for the services you undercharged and overcharged. Correcting the undercharges alone is interpreted as insurance fraud.
Preparing Written Documents in Support of a False Claim
It is unlawful for a patient or medical staff member to prepare written documents for use as support paperwork for a false health insurance claim. Unfortunately, innocent individuals sometimes face HMO fraud charges because they prepared the documents used in the false claim, even though they were acting in good faith. Hospital clerks or secretaries are often wrongly accused of this type of fraud. They prepare the documents that physicians or authorities need to submit for an insurance claim, without knowing whether the claim is true or not.
When the physician is arrested and charged with submission of a fraudulent claim, the secretary faces the same charges because they were involved in preparing the paperwork. When you are in a situation like this, you need an experienced fraud crimes defense attorney on your side to prove that you were unaware of the fraud and that you did not benefit from it.
Healthcare Fraud Elements
When proving a PEN 550 violation, the prosecutor should prove that you knew of the submission of the fraudulent insurance benefit claim or were aware that a document you prepared would be utilized to defraud a health benefit program. Additionally, the prosecutor should demonstrate that you had the plan or purpose to defraud a party or insurance agency. The prosecutor must demonstrate that you acted knowingly and with the intent to cause loss or gain undue benefits. Unless under a few exceptions, the court will find you innocent if the prosecutor cannot prove beyond a reasonable doubt that you did not plan or purpose to commit fraud.
Legal Penalties for Healthcare Fraud
Prosecutors charge healthcare fraud offenses as misdemeanors or felonies, contingent on the value of the defrauded money, goods, services, or other valuables. Other factors that affect your sentence include your criminal history and your case’s unique circumstances.
When your claim involves a dollar figure below $950, the prosecutor lodges misdemeanor charges. Upon conviction, the legal penalties you will face are:
- No more than six months of jail confinement
- At most $1,000 in monetary court fines
If a claim value is at least $950, the offense becomes a wobbler. In these situations, the prosecutor uses their discretion to charge you with a felony or misdemeanor contingent on your criminal past and the case’s facts. A misdemeanor conviction involving a value of $950 or more attracts harsher penalties than one involving a loss value of less than $950. The penalties when a wobbler healthcare fraud offense is charged as a misdemeanor are:
- At most twelve months of jail confinement
- At most $10,000 in court-imposed fines
The legal penalties for a felony billing fraud conviction are:
- 24, 36, or 60 months of confinement or probation with a mandatory one-year jail term
- At most $50,000 in court-imposed fines or double the value of the fraudulent claim, whichever is greater.
All licensed medical practitioners must self-report to the relevant licensing agency whenever they are convicted of an offense, especially one with a substantial relationship to the profession. A guilty verdict for a PEN 550 violation is substantially related to your practice. Therefore, you must report to the board so that they can commence the professional discipline process. When you have been convicted, you must face disciplinary action, including license termination or suspension. A permit revocation or termination is the harshest penalty you can face because it permanently prevents you from practicing. The career you worked so hard to achieve goes down the drain because of a simple mistake or a false accusation.
You need a criminal attorney to fight the charges aggressively and prevent a conviction. It will be easier to defend your healthcare professional permit when you do not have a conviction. Avoiding a conviction means you will not end up in jail or prison, where you cannot practice at all. A less strict sentence, like probation or fine payment, means you can defend your license and, when given the chance by the board, continue practicing.
Viable Defenses For Healthcare Fraud
With the help of a seasoned fraud crimes attorney, you can craft viable legal defenses, contingent on the case’s circumstances, to challenge the prosecutor’s assertions and arguments. In addition to challenging the case’s facts, other defense strategies your criminal attorney will mount include:
- You Did Not Act with Knowledge
Unless you are the person who submitted the false claim, your attorney can argue that you were unaware that the claim was fraudulent. The prosecutor must demonstrate that you knew or had knowledge that the claim was fraudulent for you to be guilty. So, in your defense, especially if you are charged with preparing written documents to support a false claim, your attorney can argue that you did not know the documents were intended to support a fraudulent claim. If you can prove you did not know of your employer’s intention to commit fraud when you prepared the paperwork, the court will drop your charges.
- Your Actions were Accidental, or You Did Not Purpose to Commit Fraud
Another element of a PEN 550 violation that the prosecutor must demonstrate is that you had the intention to commit fraud when you submitted a false claim. Proving intent requires the prosecutor to demonstrate your state of mind at the time you acted, which can be very difficult. The difficulty in proving intent creates an opportunity for your defense attorney to demonstrate that you lacked criminal intent or made a simple mistake that was considered healthcare fraud. If you lacked criminal intent, the court will exonerate you of the charges.
- Violation of Your Rights
Citing police violation of your rights during the healthcare fraud investigation or arrest can also act as a defense. The common violations police engage in include:
- Conducting illegal searches and seizures
- Conducting traffic stops or arrests without probable cause
- Coercing suspects into confession
- Failing to recite Miranda rights
If the police engaged in any of these violations, the evidence obtained unlawfully will be inadmissible, leaving the prosecutor with a weak case. They could be compelled to drop the charges or reduce them altogether.
Offenses Related to Health Care Fraud
Several crimes can be charged in place of or in conjunction with health insurance fraud. These offenses include, but are not limited to:
Workers’ Compensation Fraud
Submitting a fraudulent claim for workers’ compensation benefits is a separate offense under PEN 1871.4, but it overlaps with healthcare fraud. Per PEN 1871.4, it is illegal to:
- Make, or cause another party to make, a knowingly false statement or document to obtain undue workers’ comp benefits, or deny an eligible party the benefits.
- Knowingly present or cause another party to present an inaccurate statement, orally or in writing, in support of or against a workers’ comp claim.
- Deliberately aid, abet, or conspire with another party to engage in workers’ comp fraud
- Make or cause another party to make a fraudulent representation regarding benefits eligibility, with the intent to discourage the injured employee from seeking benefits for which they are entitled.
Workers’ compensation is an insurance program that employers establish to compensate employees for injuries or illnesses sustained in the course of their employment.
Workers’ comp fraud relates to health insurance fraud in that:
- You, the offender, must deliberately submit or cause another person to present a fraudulent claim for healthcare benefits covered under the workers’ comp insurance.
- You willfully bill workers’ comp insurance for a medical procedure or services covered under their policy but rendered to the claimant.
- You knowingly present multiple claims for a single medical service or procedure covered under a workers’ comp insurance policy.
Additionally, as a worker, you engage in workers’ comp fraud when you lie about where the injuries happened, fake illness or injuries, or exaggerate the severity of the disease or illness to receive more benefits than you are entitled to.
Employers commit this form of fraud when they misrepresent facts about where a worker sustained injuries to avoid paying claims. They can claim that when an employee was injured, they were not performing tasks for the benefit of the employer; hence, their condition is not entitled to benefits.
Doctors commit workers’ comp insurance fraud when they conspire with injured claimants to help them receive undue or extra benefits. Others bill multiple times for a single medical procedure or bill for services that have not been rendered.
When you are accused as an employer, employee, or medical practitioner of any of these misconducts, the prosecutor can charge you with both workers’ comp fraud and health insurance fraud.
A PEN 1871.4 violation is a wobbler. When the prosecutor prefers misdemeanor charges, a conviction attracts:
- Informal or misdemeanor probation
- Up to twelve months of jail confinement
- Court fines of at most $150,000 or twice the fraud figure, whichever is greater
- Victim restitution
Conversely, the penalties for a felony conviction are:
- Formal or felony probation
- Two, three, or five years in prison
- Court fines of no more than $150,000 or twice the amount defrauded, whichever is greater
- Victim restitution
You can avoid or reduce these legal penalties by hiring a seasoned criminal defense attorney to help you fight the charges.
Prescription Fraud
The California Health and Safety Code (HSC) defines two forms of prescription fraud, which can be committed by both doctors and patients. The first statute is HSC 11153, which criminalizes the act of doctors writing illegal prescriptions to patients. The other statute is HSC 11173, which makes it unlawful for patients to obtain or attempt to acquire prescriptions for controlled drugs using misrepresentation of facts, deceit, or fraud. Per the statute, it is unlawful for a patient to obtain or attempt to obtain controlled drugs, buy or attempt to buy controlled substances, or purchase or try to purchase controlled drugs.
An attempted prescription fraud means that you could face charges or conviction for the offense, even if you did not succeed in obtaining the drugs.
HS 11153 criminalizes prescription fraud committed by medical staff like doctors, nurses, dentists, or psychiatrists when they intentionally administer drugs to patients they are aware should not be taking the drug or administer a drug outside their area of specialty. As a health practitioner, you are only guilty under this statute if you act on purpose or willfully. If you prescribe the drugs within the specifications of the law and for the right reasons, you are innocent of prescription fraud.
Prescription fraud is a wobbler. A misdemeanor conviction attracts a maximum penalty of twelve months of jail incarceration, informal probation, or a fine of up to $20,000. On the other hand, a guilty verdict for a felony charge attracts the following legal penalties:
- Felony probation
- 16,24, or 36 months of incarceration in county jail
- At most $20,000 in court fines
Health practitioners also face collateral consequences, such as license suspension or termination, as the crime has a substantial relationship to their medical practice.
A charge does not necessarily mean you will end up with a conviction and sentence. With the help of an experienced criminal attorney, you can prepare solid defenses to prevent a guilty verdict or for less stringent penalties.
Medi-Cal Fraud
California has a healthcare insurance program called Medi-Cal that provides medical coverage to low-income families, the elderly, the disabled, and other vulnerable individuals in society. With the program providing medical coverage to a large demographic, it becomes an easy target for fraudsters. Individuals arrested for defrauding Medi-Cal face charges under the Welfare and Institutions Code (WIC) 14014, in addition to PEN 550 violation charges. The double charges and sentencing are necessary to discourage the crime, as it disadvantages the vulnerable in society, not to mention the loss of taxpayers’ money.
Lastly, patients violate WIC 14014 when they make false representations to qualify for the program or obtain benefits in an undue manner. So, you engage in Medi-Cal fraud when you receive benefits by giving false information about your eligibility, or someone else obtains the benefits after you help them prepare documents or lie on their behalf to qualify for the benefits.
Find a Seasoned Fraud Crimes Attorney Near Me
If you are under investigation for or face health care fraud or any other related offense, you must retain the services of a seasoned fraud crimes attorney. Not only do you risk legal penalties upon conviction, but your professional license may be on the line.
At CCLG: Los Angeles Criminal Attorney, we are here to assist you during these challenging times. Our defense attorneys will offer sound legal advice and represent you in court to fight for your freedom and career. Call us today at 323-922-3418 for a no-obligation consultation.
